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Novolipetsk Steel

May 17, 2016

Q1 2016 NLMK Group Consolidated Financial Results under IFRS

NLMK Group is pleased to announce its Q1 2016 financial results.

NLMK Q1 2016 revenue was $1.577 billion (-4% qoq), EBITDA margin was 18%. Free cash flow increased by 2.5x to $275 million. NLMK net profit was $57 million.

Q1 2016 highlights:

  • Sales volumes increased by 10% qoq (+5% yoy) to 4.1 million tonnes driven by the growth in finished steel sales
  • Revenue was $1,577 million (-4% qoq and -29% yoy)
  • EBITDA was $290 million (-10% qoq and -55% yoy)
  • EBITDA margin was 18% (-2 p.p. qoq and -11 p.p. yoy)
  • Free cash flow increased by 2.5x qoq to $275 million.
  • Net debt decreased to $967 million at the end of Q1 2016 (-11% qoq and -22% yoy)
  • Net debt / EBITDA was 0.61õas at 31.03.2016

Comment from NLMK Group CFO Grigory Fedorishin:

“Q1 global steel production sequentially stabilized: steel production in the US and the EU recovered, while Chinese steel production decreased. This was driven by improved steel demand and restocking in developed markets as the effects of strengthened trade barriers against steel imports from emerging markets, including from China, were felt. These factors, in tandem with the recovery in raw material prices, were behind the Q1 steel price growth.

“NLMK operates a network of production assets across its core markets; this unique model ensured a 10% growth in sales in Q1 against the previous quarter to a record 4.1 million tonnes, thus keeping utilization rates at maximum levels. Our revenue was down by 4% qoq due to a lag in recognition of export sales; hence, our sales reflected bottom level prices of the previous quarter. Growth in steel prices seen in Q1 will be reflected in our Q2 revenue.

“The sequential decrease in steel prices was partially offset by a positive effect from the ongoing operational efficiency programme. As a result, our Q1 EBITDA margin stood at 18%.

“Total capex allocated to the implementation of Strategy 2017 and to maintenance was $121 million.

“Working capital management and conservative investments drove our free cash flow to $275 million, a 2.5x increase compared to Q4 2015, and ensured a further decrease of our net debt.

“At the meeting held on the 22nd of April 2016, NLMK Board of Directors recommended approving Q4 2015 and Q1 2016 dividends of RUB 2.43 per ordinary share and RUB 1.13 per ordinary share, respectively. Dividend payment will be approved at the upcoming Annual General Shareholder Meeting (AGM) to be held on the 3rd of June 2016.

“The total amount of dividends for 2015 is expected to be RUB 6.95 per ordinary share, or 67% of net income and 65% of free cash flow of the Group generated in 2015.”

NLMK_Financial_Release_Q1_2016571.94 Kb

Financial_and_operating_data_Q1_201681.96 Kb

Presentation_Q1_2016_IFRS_Results1.83 Mb

NLMK_IFRS_Financial_Statements_Q1_2016421.79 Kb




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